The People’s Bank of China (PBOC) pumped 398 billion yuan (US$ 62 billion) into the financial system via medium-term lending facilities (MLF). The interest rate for one-year MLF loans was 3.25 percent, the central bank said in a statement on its website.

The central bank also conducted 80 billion yuan of seven-day reverse repos and another 70 billion yuan of 14-day reverse repos yesterday. The move was intended to maintain a stable liquidity level as tax payments and maturing MLF and reverse repos have led to a large decline in liquidity in the banking system, the PBOC said in the statement.

The MLF tool was first introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral.

A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

The central bank has increasingly relied on open market operations for liquidity management, rather than cuts in interest rates or reserve requirement ratios.

The PBOC said it would conduct open market operations in a flexible way to meet the seasonal liquidity needs of banks.